Correlation Between CH Robinson and Star Jets
Can any of the company-specific risk be diversified away by investing in both CH Robinson and Star Jets at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining CH Robinson and Star Jets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CH Robinson Worldwide and Star Jets International, you can compare the effects of market volatilities on CH Robinson and Star Jets and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in CH Robinson with a short position of Star Jets. Check out your portfolio center. Please also check ongoing floating volatility patterns of CH Robinson and Star Jets.
Diversification Opportunities for CH Robinson and Star Jets
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CHRW and Star is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding CH Robinson Worldwide and Star Jets International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Jets International and CH Robinson is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on CH Robinson Worldwide are associated (or correlated) with Star Jets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Jets International has no effect on the direction of CH Robinson i.e., CH Robinson and Star Jets go up and down completely randomly.
Pair Corralation between CH Robinson and Star Jets
Given the investment horizon of 90 days CH Robinson is expected to generate 60.5 times less return on investment than Star Jets. But when comparing it to its historical volatility, CH Robinson Worldwide is 23.83 times less risky than Star Jets. It trades about 0.11 of its potential returns per unit of risk. Star Jets International is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 0.70 in Star Jets International on September 1, 2024 and sell it today you would earn a total of 1.17 from holding Star Jets International or generate 167.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CH Robinson Worldwide vs. Star Jets International
Performance |
| Timeline |
| CH Robinson Worldwide |
| Star Jets International |
CH Robinson and Star Jets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CH Robinson and Star Jets
The main advantage of trading using opposite CH Robinson and Star Jets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CH Robinson position performs unexpectedly, Star Jets can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Star Jets will offset losses from the drop in Star Jets' long position.| CH Robinson vs. JB Hunt Transport | CH Robinson vs. Landstar System | CH Robinson vs. Hub Group | CH Robinson vs. Forward Air |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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